Investments Haunting `Outsider' Alexander

Deals As Governor, University President Added To His Wealth

WALLAND, Tenn. — When he was a crew-cut child in the 1950s, Lamar Alexander raced through the forests here, fished the streams for trout and camped at night beneath the rolling, Smoky Mountain sky.

Now Alexander is dogged by questions about a million dollar retreat he helped build in these wooded coves--a luxury hotel and cabin complex he named Blackberry Farm.

Since he emerged as a clear contender for the Republican presidential nomination, Alexander has been forced to rehash details of the deals that seemed so right a decade ago but that now appear to have blurred the line between public office and personal financial gain.

He must explain, for example, how when he was University of Tennessee president from 1987 to 1991, he directed his aides to book $64,626 worth of state-funded conferences and receptions at the hotel he partly owned.

The lucrative university functions are only part of the deals related to Blackberry Farm, and the resort itself is only one of Alexander's ethical quandaries.

In recent weeks, the self-professed "Washington outsider" in the red plaid shirt has been forced to confront myriad politically connected investments. Together, they helped build his personal wealth from $151,000 when he became Tennessee governor in 1978 to between $1.5 million and $3 million when he was appointed U.S. education secretary in 1991.

Among them is also the $620,000 profit Alexander garnered from a $1 investment in a brokered sale of the Knoxville Journal newspaper in 1981, when he was Tennessee's governor. On the campaign trail and at a candidates' debate Thursday, Alexander defended the deal. He said it shows he has the business experience needed to run the White House and portrayed himself as the sale's organizer.

But his partners, including former Sen. Howard Baker (R-Tenn.) and former Gannett Co. chairman Al Neuharth, said in recent interviews that Alexander had only a peripheral role in the Knoxville Journal transaction. Still, he used his official governor's stationery to advance his interest in the deal, Tennessee archives show.

But of all of the surging candidate's potential conflicts of interest, the most difficult to explain has been the one closest to home.

From the front porch of the authentic log cabin that he imported from a neighboring county and reconstructed on Blackberry Farm, Alexander can look out at the East Tennessee mountains where Davy Crockett roamed.

He also can survey the lavish getaway cabins of the Tennessee businessmen who financed his political campaigns and arranged the investments that made him a millionaire.

Told in Blount County land records and letters filed among the Tennessee archives, the story of Blackberry Farm is a tale of sentimental and political ties--and of a millionaire who spent hundreds of thousands of dollars trying to re-create the rustic simplicity of his childhood camping trips.

Alexander emerges as a neighbor fussy enough to file legal papers restricting fellow cabin owners from having mobile homes, unchained pets, clotheslines or anything that might "impair the viewscape of the Alexander property."

He is also a public official at times so oblivious to ethical conflicts that in 1991 he claimed he had divested his interest in the resort. In fact, he transferred it to his wife.

On Friday Alexander continued to fend off repeated questions about his finances.

"It is no secret that I have made some money," he told reporters. "I'm accustomed to tough questioning and I'm comfortable with my ability to provide answers."

"It never occurred to him that Blackberry Farm would create the controversy it has. It was always just a break-even thing," said James A. Haslam II, a campaign contributor and co-investor in the resort who then-Gov. Alexander appointed to the Tennessee Technology Foundation. Haslam is chairman of Pilot Corp., one of the nation's largest diesel fuel sellers, with annual revenue of more than $1 billion.

"Lamar and I walk the mountain trails together on Thanksgiving," said R. Brad Martin, chairman of the Proffitt's Inc. department store chain and an investor in Blackberry Farm. A former Republican state senator and contributor to Alexander campaigns, Martin also brought him into a lucrative child care company investment and built a lavish country home on his portion of the resort.

Blackberry Farm's other investors all have been figures in Alexander's private business deals and campaign funding: Samuel E. Beall III, head of the Morrison's Inc. food service company; Knoxville Porsche dealer Tom Harper; and attorney W. Baxter Lee.

"We're good friends and sometimes good business partners and we all love the mountains," Alexander said in a recent interview.

The partners assembled a 1,020-acre tract in four separate land deals between 1976 and 1979, borrowing the $901,250 purchase price from banks and the sellers.